Remortgage market "dead as a dodo"

Mortgage lending for house purchases continued to grow in September. However, at the same time remortgages continued to plummet, according to British Banking Association (BBA) figures.

Monthly mortgage approvals for house purchases reached over 40,000 in September for the first time in two years, but remortgages continued to fall to around 20,000 after reaching nearly 80,000 in early 2008.

However, the rise in house purchase mortgage approvals doesn't necessarily mean an increase in housing market activity, warned David Dooks, statistics director at the BBA.

"Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year," he said.

"Housing market activity will depend, however, on more properties coming on to the market."

The figures came as a surprise to mortgage lender Legal and General, where some advisors expected remortgages to account for 60 per cent of their business by now, said the firm's director of mortgages Ben Thompson.

He explained: "The remortgage market is as dead as a dodo according to the figures from the BBA."

"And let's face it, [it] isn't going to change much for a long time to come. As long as the bank base rate stays this low then there is little incentive for borrowers to shift from their standard variable rate."

Get a cheap landlords insurance quote today from Simple Landlords Insurance.